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What Are the Medicaid Implications of Sheltering an Alzheimer's Victim's Savings in a Separate Account?

August 27th, 2013

Q

In the case of an elder diagnosed with Alzheimer's, is it acceptable to transfer their savings into a separate account with the names of their children to safeguard the funds? The concern is the possibility of the elder with Alzheimer's having access to withdraw and/or gift the funds without realizing the consequences. Can the funds be maintained in this separate account and only withdrawn and transfered to the elder's normal account for paying their bills, personal needs, care, etc.? If the time should come for nursing home care and Medicaid application, and trackable documented transactions are maintained showing the funds were used for the elder's needs, would the full original transfered amount be considered available funds when determining Medicaid eligibility, or would it be the balance remaining in the account?

A

What you describe should work as long as you are able to document every cent. Otherwise the senior can be deemed ineligible for Medicaid benefits until the nursing home costs equal the amount transferred. The way this works is that Medicaid creates a period of ineligibility for benefits for a period of time based on the amount transferred. If you can show that the funds transferred were used for the elder, they will be deemed as having been returned and as if they had never been gifted in the first place. But the burden of proof is on you.

Margaret A. O'Reilly, PC

Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...

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Farr Law Firm

In practice since 1987, Fairfax Attorney Evan Farr is widely recognized as one of the leading Elder Law, Estate Planning, and Specials Needs attorneys in Virginia and one of foremost experts in the Country in the field of Medicaid Asset Protection and related Trusts. Evan Farr has been quoted or cited as an expert by n...

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Hale Ball Carlson Baumgartner Murphy PLC

Jean Galloway Ball is certified in Elder Law by the National Elder Law Foundation. She is a 1977 honors graduate of the National Law Center, George Washington University, and she did her undergraduate work at the University of California at Berkeley, graduating Phi Beta Kappa in 1971.
She is admitted to practice in Vir...

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